Friday’s grain market dips

Mexico buys a fresh batch of U.S. corn Friday.

On Friday, the CME Group’s farm markets trade weaker.

At the close, the March corn futures finished 6¢ lower at $4.20½. May corn futures closed 5¼¢ lower at $4.23¾. 
 
January soybean futures ended 5¼¢ lower at $11.63¼. March soybean futures finished 5¼¢ lower at $11.65.

March wheat futures closed 9¢ lower at $5.75½. 

Jan. soymeal futures settled $4.50 per short ton lower at $385.50.

Jan. soy oil futures finished 0.68¢ higher at 38.41¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.35 per barrel higher (+0.77%) at $45.99. The U.S. dollar is higher, and the Dow Jones Industrials are 172 points higher (+0.58%) at 30,141 points.

On Friday, private exporters reported to the USDA export sales of 182,020 metric tons of corn for delivery to Mexico during the 2020/2021 marketing year.

The marketing year for corn began September 1.

Bob Linneman, Kluis Advisors, says that investors are looking at outside market factors for grain price direction. 

“The slide to new lows near 90.50 in the U.S. dollar has a few traders wondering how much lower the dollar may dip before finding support. A strong move to new nine-month highs in the crude oil would suggest traders have a high degree of confidence that any COVID-19 closures are secondary to the impact of the vaccine. A slow week of export data has the grain traders watching the outside markets closer than they have in the prior few months,” Linneman told customers in a daily note.    

He added, “Keep a close eye on the charts. New lows next week could mean a bigger change in trend is unfolding. Conversely, new highs could set the stage for another leg higher in prices.”

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets close mostly higher.

At the close, the March corn futures finished 2¾¢ higher at $4.26½. May corn futures finished 2¼¢ higher at $4.28¾. 

January soybean futures settled 15¼¢ higher at $11.68¼. March soybean futures ended 15¼¢ higher at $11.70¼.

March wheat futures settled 4¢ lower at $5.84½. 

Jan. soymeal futures settled $4.40 per short ton higher at $390.00.

Jan. soy oil futures are 0.81¢ higher at 37.73¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.39 per barrel higher (+0.86%) at $45.67. The U.S. dollar is lower, and the Dow Jones Industrials are 151 points higher (+0.51%) at 30,035 points.

Separately, the USDA’s Weekly Export Sales Report Friday shows strong demand figures for corn.

  • Corn = 1.37 million metric tons vs. the trade’s expectations of between 800,000 mmt. and 1.60 mmt. Mexico was the biggest buyer at 656,900 mt.
  • Soybeans = 406,900 metric tons. vs. trade’s expectations of 400,000 mmt. to 1.2 mmt. Of that total, China bought most of the soybeans.
  • Wheat = 446,400 mt. vs. the trade's expectations of between 200,000 and 400,000 mt.
  • Soybean meal = 163,800 mt. vs. the trade’s expectations of 100,000 to 300,000 mt.

Bob Linneman, Kluis Advisors, says that investors with long contracts are getting nervous. 

“Corn and soybean prices managed to end quietly mixed on Wednesday. Corn was down over a nickel while soybeans were down more than 20¢ at one point. This rebound was a small win for the bulls, but it needs to be followed with further buying, or the bears will be quick to press lower. The lack of daily export sales is likely making some fund managers nervous holding longs. Improved rain forecasts for some areas of South America are also aiding the bear camp. It is worth noting that China purchased rice from India for the first time in over 30 years due to production shortfalls of other main rice exporters. China seems intent on replenishing domestic food supplies,” Linneman told customers in a daily note.     

He added, “After a 25¢ pullback in corn and nearly a 60¢ selloff in soybeans, prices are approaching significant areas of support. If there were buyers on the sidelines waiting for a pullback, then this sure seems like a good spot on the charts to enter the long side. However, COVID shutdowns may change the playing field for the grains over the short-term.”

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s wheat market pulled up corn prices.

At the close, the March corn futures closed 3¢ higher at $4.23. May corn futures settled 2½¢ higher at $4.26. 

January soybean futures closed 9¢ lower at $11.53. March soybean futures closed 8¼¢ lower at $11.54¾.

March wheat futures closed 11¼¢ higher at $5.88½. 

Jan. soymeal futures closed $4.60 per short ton lower at $385.60.

Jan. soy oil futures closed 0.09¢ lower at 36.92¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.66 per barrel higher (+1.48%) at $45.21. The U.S. dollar is lower, and the Dow Jones Industrials are 64 points higher (+.18%) at 29,878 points.

Jack Scoville, PRICE Futures Group, says that, all in all, the markets are holding very well, considering.
 
“It is still a weather market and the weather is improved in Brazil and Argentina.  We are three days into a down move, so much of the spec profit taking should be wrapping up and a more sideways market is possible for a time. A lack of Chinese demand is also hurting the market, due to no daily sales announcements,” Scoville says. 

Al Kluis, Kluis Advisors, says that investors’ attention now turns to the upcoming USDA Crop Production reports next week.

“On Tuesday, commodity fund selling and liquidation of speculative longs pressured grain prices," Kluis told customers in a daily note. “The USDA will make a slight reduction in the size of the corn and soybean crops in Brazil and Argentina in the December Crop Production reports. The USDA does not usually make changes as fast as private crop forecasters, and they often do not make significant changes until later in the growing season. They have plenty of future reports to move the crop size lower.”    

He added, “I am watching private trade estimates for the crop size in South America. One of my most respected sources has reduced the corn crop in Brazil by 2.0 million metric tons (mmt) this week. Soybean production in Brazil was taken 2 mmt lower.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets start lower, turn higher, close lower.

At the close, the March corn futures closed 5¼¢ lower at $4.20¼. May corn futures closed 5¢ lower at $4.24½. 

January soybean futures closed 6½¢ lower at $11.62½. March soybean futures finished 6½¢ lower at $11.63½.

March wheat futures ended 7¾¢ lower at $5.77¼. 

Jan. soymeal futures closed $0.30 per short ton lower at $390.20.

Jan. soy oil futures closed 0.48¢ lower at 37.01¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.79 per barrel lower (-1.74%) at $44.55. The U.S. dollar is lower, and the Dow Jones Industrials are 303 points higher (+1.02%) 29,942 points.

Al Kluis, Kluis Advisors, says that this is the time of the year when the markets react to South America’s crop growing weather.

“The combination of beneficial rain in South America and end-of-the-month selling resulted in large losses,” Kluis told customers in a daily note. “The dry weather in South America is doing more damage to the corn crop than the soybean crop so far. With delayed planting in Argentina and the current corn/soybean ratio, some Argentine farmers may shift some soybean acres over to corn.”    

He added, “Will the hard drop in the U.S. dollar and the current sell-off in the grain markets bring global grain buyers back into the U.S. market in early December? Note that the soybean market has put in the significant lows early each recent month: September 2, October 2, and November 2.”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets drop.

At the close, the March corn futures closed 7¾¢ lower at $4.26¼. May corn futures settled 7¾¢ lower at $4.29. 

January soybean futures closed 23¼¢ lower at $11.68½. March soybean futures ended 23¼¢ lower at $11.69½.

March wheat futures closed 21¢ lower at $5.85¼. 

Jan. soymeal futures finished $5.80 per short ton lower at $390.50.

Jan. soy oil futures closed 0.94¢ lower at 37.34¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.15 per barrel lower (-0.33%) at $45.38. The U.S. dollar is higher, and the Dow Jones Industrials are 369 points lower (-1.23%) at 29,541 points.

On Monday, private exporters reported to the USDA the following activity:

  • Export sales of 140,000 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.
  • Export sales of 204,000 metric tons of corn received in the reporting period for delivery to unknown destinations during the 2020/2021 marketing year.

The marketing year for corn began Sept. 1.

Al Kluis, Kluis Advisors, says that all eyes are on South America’s crop growing weather.

“The corn crop size (and possibly the soybean crop size) estimates for both Brazil and Argentina will move lower when the private estimates are released later today. The weather late last week and over the weekend shows that the weather models are overstating the amount of rain that will be received,” Kluis told customers in a daily note.    

He added, “Who will make – and who will take – delivery on the December corn, soybean meal, and wheat contracts? No deliveries have been posted today, on the first delivery day on the CBOT.  This will show how the commercials want to position in the cash markets.”

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